In a nutshell, accounts payable is about a whole lot more than invoices.
According to a recent survey conducted in partnership between Tipalti and Gatepoint Research, which spanned 100 senior level finance executives based in the United States, gaps remain in the supplier payments process that can have a significant impact on the bottom line and within a firm’s day-to-day time management.
In the survey, titled “Global Payment Operations Trends,” efficiency in processes remained top of mind, with 48 percent of those surveyed stating that they see tax and regulatory compliance as among the most important business goals over the next year and a half, followed closely at 44 percent by automated payments.
In an interview with PYMNTS, Rob Israch, chief marketing officer with Tipalti, said that the most glaring inefficiencies that cost firms, in ways both immediate and longer-term, stem from the fact that too many staff members across the firm “are dealing with supplier payments’ minutiae.” Wrestling with outmoded payments practices — think paper checks, for one example, used by 86 percent of firms surveyed — means that finance professionals, from the CFO down, are busy dealing with payments issues rather than the longer-term strategic direction of the company.
And, said Israch, as companies go increasingly global, the fact remains that staffing gets ramped up simply in order to deal with accounts payable and longer supply chains. That means money is shifted in order to help pay for staff, where it could, in the advent of automated, streamlined processes, instead be invested in the longer-term growth of the enterprise.
Among the most surprising findings in the survey, according to Israch: Financial professionals are spending as much as 10 hours each month simply dealing with the manual processes tied to AP management. For the largest firms, the most pressing issues remain tied to taxes and compliance. The onboarding of new payees also presents a bit of efficiency drag, as 36 percent of respondents onboard payees through direct contact, such as in-person appointments. Overall, 79 percent of those surveyed have been using manual processes.
All too often, noted Israch, accounts payable functions are treated solely as a transactional, invoice-driven part of the company, when, in fact, the AP function increasingly must deal with any number of risk control factors and regulatory and compliance mandates. Taxes are an increasing burden, as measured by compliance and regulation, and Israch stated that the IRS is increasingly setting its sights on making sure that the payors show full compliance with how, when and how well-documented their payments (and taxes collected) are done up and down the supply chain.